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GST made taxation simple. Let's find out the impact of GST on the retail industry.
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The retail industry is the fastest growing industry in India also in the world. The retail industry growth rate was 23% in 2017 in comparison to 2016 and is expected to grow at a higher rate in 2018. A research says retail industry in India expected to see a growth of 1100 trillion US $ by 2020. In the year 1990, the retail industry captured 23% of the total market and after 2000 it captured 43%. And with this growth rate, Indian retail industry is marching towards becoming the largest retail sector in the world. Retail in India
Retail Under GST GST brings both some positive & negative impact on the retail sector. GST is a unified tax implemented by Govt. of India to make the taxation process simpler also to empower ease of doing business and give rise to more creative entrepreneurs. Before GST retailers have to pay VAT, CST, Excise duty and other charges but after GST came into effect they have to only one tax despite the fact that tax percentage increased to a higher rate. To encourage retailers Govt approves 100% FDI.
To find out whether retail industry growing under GST or not, first let’s find out benefits & issues GST brings to this industry….
Higher threshold limit During the VAT threshold limit was between 5-15 Lakh and in GST its 20 Lakh. Easy Return Filing In this new tax, structure retailers are paying low taxes in comparison with VAT. Tax reduction is the main positive impact or says good news GST gifted to retailers. Low Tax Rate Return filing is a process to claim the taxes paid by business to the Govt at the time of purchase. Return filing process became more transparent & easy also GST provides a quick refund. Benefits
Hasslefree goods transport GST council made E-Way bill compulsory for interstate & intrastate goods transport. Govt. implemented e-way bill operation to make transportation seamless & easy by abolishing check post verification. E-way bill empowers retailers to do more business and manage inventory easily. Revise Business strategy Unlike VAT in GST promotional goods & services are tax liable. Retailers has to figure out new strategies to achieve their business goal by complying with GST rules. Faster growth GST introduces composition scheme to give the rating to a business as per its accordance with GST rules & regulations. Good rating will attract more business. And E-Way bill also creates room for more business. Benefits
These are some benefits GST has in its kit for the retail sector but there are also some disadvantages with this new tax structure. Issues
1 Unable to understand 2 Online tax filing 3 Pay more tax
Unable to understand The main disadvantage of GST is, startups find it difficult to understand and comply with its rules & regulations. Except for composite taxpayers, others have to file monthly GST returns and need to update sales & purchase details on GST portal. It's time consuming and a little bit complicated for those who have less accounting knowledge Online tax filing GST return filing has to be done on its portal, which is web-based. Due to lack of internet knowledge & poor internet connection in the rural sector, it became difficult for business owners to file tax on time. It’s a major setback for GST. Pay more tax Under GST every business has to pay tax also has to include tax while raising invoice. So, its became a burden for small business to pay tax amore tax as tax is fixed for every item.
